A moderate start for current account balance

trade data came in positive last week, while inflation GROWTH AND FOREIGN data exceeded the expectations. The Central Bank’s decisive statements to investors following Moody’s Turkey’s country note were the other positive developments of the week.

The most important day of the week ahead will be March 8: International Women’s Day, celebrated across various countries for over a hundred years before receivin global acknowledgment in 1977 at the United Nations.

We will see various celebrations and messages of praise but my favorite is “Women are human, we are humankind”, coined by Neset Ertas (1938-2012), a Turkish folk music singer, lyricist, modern ashik and virtuoso of the traditional Turkish instrument, the baglama. I commemorate him and celebrate Women’s Day on this day.

The Turkish Statistical Institute (TurkStat) will announce December labor force data on Wednesday morning. As you know, labor force data is calculated using the average of three-month periods. For example, the November data was the average of the •ctober-November-December period. This week’s December data will be announced by calculating the average of November-December and January. However, (together with European Union states) TurkStat will end this practice as of the next labor force data and begin announcing monthly data. The unemployment rate stood at 12.9% in the November period. So we saw that the 2020 unemployment rate, which will be announced on March 22, will be 13.2%.

The Central Bank will announce January balance of payments data on Thursday morning. The current account deficit was well above expectations and the Middle Term Plan goals at USD 36.7bn in 2020. The rate of the current account deficit on GDP reached 5.1% during the same period. I believe we will see a more moderate deficit in 2021 compared to the previous year. January’s current account deficit will be slightly below the same month of the previous year. As such, goods exports increased by 2.3%, while imports decreased by 5.9%.

The industrial production index will be the last important datum of the week. Industrial production has been lively since the beginning of 2020. The January purchasing managers’ index (PMI) stands at 54.4. This means we can expect an increase in industrial production.